Interest rates are climbing. Hushed whispers of an impending economic recession are gaining traction, both in the media and around the water cooler. Small and medium-sized business owners should be prepared to make the most of their marketing budgets and existing resources. Here, we will review five digital marketing stratagems that may not only help you survive but thrive during a recession.
1) Optimize what already works
During an economic downturn, businesses typically look to cut costs wherever possible. However, wholesale slashing of marketing budgets without any strategic guidance will most certainly eliminate channels that perform well by converting audiences into customers. Try not to fall into an “all-or-nothing” mentality when looking for areas to eliminate costs.
Instead of making across-the-board cuts, take a data-driven approach to evaluating your marketing efforts and audiences. It may seem obvious but consolidating your advertising budget in higher-performing segments is key to making the most of a tight budget.
Often, the lower costs inherent to running digital marketing campaigns means marketers are more cavalier with campaign ROAS (return on ad spend). Limiting loss-leader and under-performing expansion/learning campaigns can rein in costs while cushioning your existing bottom line. Work with your team to identify which ad campaigns and channels are still delivering profitably and focus your budgets there.
2) Expand your reach to similar customer archetypes
As a successful business owner, you already possess key points of data about your end consumer — possibly more than you’re actively aware. Finding additional potential buyers that mirror your existing, happy clientele typically means prospecting the unknown. There is a better way, however. Expanding the reach of your digital marketing initiatives to potential customers who are similar to your current customer base can cut your lead times and narrow your search radius. Enter lookalike audiences.
Lookalike audiences are crafted on mature digital marketing platforms like Facebook, Google Ads and Shopify. By opting in or securely supplying these channels with details on your current customers, these platforms put their powerful data-crunching abilities to work for you. By developing “customer archetypes,” profiles based on shared behavioral markers, these platforms can then identify other consumers who may fit into those criteria.
To be clear, any information you provide is kept securely tied to (only) your account and hashed (or encrypted) to ensure your users’ privacy. The data you provide is simply used to create the customer archetypes. Personally identifiable information is never used to directly target those users. Instead, the platforms present your ads to other users that fit the newly created templates.
Deploying lookalike audiences enables you to find prospects who are more likely to convert and do business with you. These potential customers have already been through the process of becoming paying customers for someone in a similar space. That means their barrier to entry is typically lower as they possess a proven interest in your offering.
Be aware, however, recent changes in the tracking and collection of personalized marketing data have decreased the accuracy of audience-based tools. While still effective, you may need to experiment with the program to achieve your best results. And remember, never purchase audience data from a third party. You’ll want to ensure that you only provide highly engaged customer segments from your own properties.
3) Cater to your existing customers
During a recession, many businesses make the mistake of thinking they need to acquire new customers at all costs. It is often more cost-effective, however, to focus on retaining and growing your current customer base. Depending on your industry, 20%-30% of your business should be generated from repeat buyers. According to Frederick Reichheld of Bain & Company, increasing your retention business by as little as 5% can result in a sizable jump in profits amounting to 25% or more.
Once you have a handle on your upper- and mid-funnel audiences, it’s time to focus on getting the most from your current and returning base. Keeping existing customers engaged and coming back for more, especially during tougher economic conditions, is best achieved by creating real and lasting value for them.
Attractive loyalty or VIP programs can incentivize clients to continue doing business with you. They introduce gamification strategies and increase communication touch points. If you implement one, be sure to include loyalty points balance reminders or warnings about the expiration of points in your regular email correspondence. These data-driven points help personalize the experience for each customer and can spur them to commit to purchasing items stored in their cart or wish list.
Upselling and cross-selling existing customers on complementary products and services can also help you generate more revenue from your existing customer base. Automated drip campaigns, deployed via email or SMS (aka texts), can easily identify and target orders that included core product purchases but lacked popular add-ons. Furthermore, leveraging single-click, post-purchase add-to-order opportunities can also increase cart value by taking advantage of a customer’s FOMO (fear of missing out).
4) Remain visible and approachable via powerful customer success tools
Providing an exceptional customer experience throughout the entire sales process and beyond will keep your current and potential customers happy and engaged. Make it easy for them to receive help, give honest feedback or provide input on your products and services. This accessibility will help them feel more invested in your success.
Incorporating tools such as on-site chat and providing customer service options via SMS can speed up response turnaround times while also keeping leads in a purchasing mind space. Consumers appreciate responsive vendors, and offering near real-time answers is a terrific option to alleviate early concerns and build a rapport. Barriers to purchase or cart abandonment can often be quickly removed with a few well-worded, and often automated, responses.
With that said, automation isn’t always the way to go. In a seemingly impersonal, hands-off world, authentic customer-facing touch points and outreach will set your offerings apart from the competition and increase mindshare. Consider crafting hand-written thank-you notes to your top clientele. Initiate conversations by offering those high-worth clients personalized check-ups on their service usage to ensure they are maximizing their own budgets. You may be surprised at how effective, simple, approachable messaging can improve the strength of your existing relationships.
5) Maintain or grow mindshare
As businesses scale down their marketing efforts, advertising rates typically dip in response to decreased demand. When your competition pulls back on their own marketing spend, you can take advantage and go on the offensive.
If you traditionally market solely with an eye on immediate sales or conversions, advertising during a recession can provide opportunities to pivot towards brand-related initiatives. If you’ve already optimized spending on your core audiences as suggested above, consider reinvesting those monies with a goal in gaining market share. It’s a savvy, low-risk approach which can help solidify or form a foundation for future growth.
Economic downturns do not last forever, yet it is imperative to envision how your core consumers’ behavior might adapt to the changing marketplace. Once their purchasing patterns shift, those changes may become permanent, therefore, you should anticipate any potential pivots. Conducting surveys can offer early insights into shifting preferences or economic pressures. Having this data on hand can make it easier to react to changes in price sensitivity and order frequency, for example.
Businesses which remain attentive, agile, and keep their finger on the pulse of their customers and competition alike can weather economic uncertainty. Smart moves, not necessarily bold moves, will help ensure your business does not only survive a recession, but thrives.
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by Absolute Web
source: www.bizjournals.com/southflorida/